"Radical" approach to transfer pricing announced

News Article - 04 January 2008
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UK tax authority HM Revenue & Customs (HMRC) is launching a "radical" new approach to transfer pricing.

Following a study by Ernst & Young which found that 87 per cent of multinationals find transfer pricing a high risk in business reporting, HMRC has announced it intends to introduce a consistent approach to the issue.

"We are now launching a radical new technical specialism, that reaches across our operational, economic analysis and policy units, to deliver the approach," stated the department.

Transfer pricing specialists will be appointed and arrangements made to train them further, it added.

According to Ernst & Young's survey, enhanced documentation concerning transfer pricing means companies need to manage their financial risks with enhanced precision and that business reports need careful planning.

In April, HMRC plans to publish statistics revealing the average time it took to settle a transfer pricing enquiry between January and March 2008.

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